Restaurant Real Estate Still Cooking in Manhattan

Despite a faltering economy, almost twice as many restaurants opened than closed, according to the 2003 Zagat New York City Restaurant Survey, and although the survey surfaced almost a year ago, the culinary trend of Manhattan eateries is still going strong, according to real estate brokers.

Rocco DiSpirito s and NBC reality series “The Restaurant,” aside, these days it s less about celebrity chefs and impressive spaces than about having a homey feel, good service, and of course, great food. The fact that many building owners are desperate for tenants has helped ease the way in opening up new eateries.

“A lot of people are looking [for restaurant space],” said seasoned real estate broker Cindy Glanzrock, vice president at Trammell Crow. “Chefs call me, owners of buildings who previously would not have wanted to rent out space for a restaurant, and are saying, we will take restaurants. The economy is open to other things.”

That applies to parts of the city where tourists and “Old New York” meet, as well as to neighborhoods like the Lower East Side that harbor trendy eateries like Salt Bar (Melissa O Donnell s downsized version of her Soho restaurant), and Bao 111, which serves French Vietnamese fare.

“The obvious trend is these East Village, Lower East Side restaurants,” said Glanzrock. “It s not just about the space, it s about quality service and a homey feel. A great example of this is the Blue Goose Cafe; it s a little gem. All of these rustic eateries like Supper and Home, you are sharing tables and there is such a mixed group there. There are a million great spots to go to in the city, but those environments are about letting down your New York intensity and edge.”

Buyers, whether they are chefs or restaurant developers, are all mainly looking for the same things. They want basement space, prep kitchens, and of course, cold storage is a necessity. Prices per square foot vary from $60 to $120 a square foot or higher, and most chefs and restaurateurs do not want to have to build their own kitchen from scratch, but they do want to bring in the newest and best equipment to set up shop.

“It s a time when people can afford to get prime space for decent rents, and to lock in affordable rents in prime spaces,” said Amira Yunis, a managing director at Newmark & Company. “If you look at the major restaurants, they are all on side-street locations, and if you think about it, a lot of the biggest restaurants don t have a lot of frontage.”

The Capital Grille, the high-end chain restaurant owned by Rare Hospitality, Inc., which Yunis just represented, will not be among those less visible restaurants. It will open a New York flagship in the Chrysler Center in the Philip Johnson designed Trylons wing and should be a welcome newcomer in the midtown area. The hearty steakhouse fare and select wine list of this multi-star restaurant should appeal to the midtown crowd and tourists alike.

“It was a marriage of the perfect tenant for the perfect space,” said Yunis, who brokered the deal between Rare Hospitality and Tishman-Speyer. (Andrew Goldberg, Eric Gelber and Loren Baron of CB Richard Ellis represented Tishman Speyer.) “The space [Chrysler-Trylons] is really interesting and that area is a very underserved market.”

Yunis said the 20-year lease was for about 9,900 square feet on the ground floor and 5,000 square feet on the lower level, which will anchor the space along East 42nd Street.

And, as the Trylons wing has stood empty since Tishman-Speyer created it, the urban myth of the “cursed restaurant” won t apply. The legend in the restaurant business goes that if a restaurant fails in one space, another restaurant may be cursed to fail, too, if they open in the same location.

Drawing the best chefs is a better hedge against failure. Brokers say the current trend is to recruit from outside New York. “Restaurateurs look for chefs. Bringing in new chefs from outside New York, whether they are national or international, is the new trend that help restaurants stay fresh,” said Glanzrock.

“For example, the new chef at Compass is Mark Andelbradt, and he was at True in Chicago. Inside the kitchen is what matters, and the chef exemplifies what happens inside of the kitchen. It s no longer about celebrity chefs.”